ISA/Rights Issue

tonygee_3

If a company held within s/s ISA announces rights issue and u have used your full annual allowance can u still include new shares within ISA?

Blah99

tonygee wrote: »

If a company held within s/s ISA announces rights issue and u have used your full annual allowance can u still include new shares within ISA?

Not sure what you mean by "include new shares". Taking up rights with money already in your ISA is not new money, so you're fine. If you need to add new money to the ISA to take up your rights, then you're scuppered by the allowance, so take them up outside.

barak

Blah99 wrote: »

Taking up rights with money already in your ISA is not new money, so you're fine. If you need to add new money to the ISA to take up your rights, then you're scuppered by the allowance, so take them up outside.

I'm sure your first point is correct, but I'd be surprised if it was practical or even possible for someone to take up rights 'offered' inside an ISA - outside it, if you see what I mean.

What is possible is that the ISA manager might, for example, allow their nominee holders to sell enough of their existing holding within the ISA in order to take up the rights offered.

Blah99

barak wrote: »

I'd be surprised if it was practical or even possible for someone to take up rights 'offered' inside an ISA - outside it, if you see what I mean..

I've never done it, but I don't see why it wouldn't be possible. The ISA is your personal wrapper that's invisible to the company you're investing in. You're simply on their register of shareholders, so they send you the rights offer. If you take up the rights I'm sure you could do it outside the ISA because a) the company doesn't know your ISA exists, and b) your ISA doesn't care what you do or don't put in it.

There might be a logistical problem with your broker, in that they might want to automatically allocate your rights take up to the same account you hold the original shares in, which would of course also be that ISA account. But again that's a broker product/administration thing, not an ISA or a rights issue thing. I'm sure you could sort it out with them and open a "normal" nominee account and get them to put your rights take up in there.